Leaning Left 11/24/2011

Leaning Left

Jim Fitzgerald

What would be the difference between tax increases or spending cuts? Both approaches to deal with the debt may have the same effect on the economy.  The GOP complains that tax increases will take money away from the rich when they need it most. But just as surely as tax increases take money from the economy, so do spending cuts.

Let me point out the difference between these two approaches and why the Democrats are so opposed to the spending cuts proposed by Republicans. Spending cuts have a nice ring to them and surely sounds like they would solve so many problems with the debt. And that could be true but almost every cut the GOP proposes is aimed directly at the middle class. They want to eliminate all deductions and tax credits for everyone. Who do you think that will hit the hardest?

Ronald Reagan did the same thing during his Presidency. He adjusted the tax code and downsized deductions which primarily impacted the middle class. I vividly remember how his tax cuts, along with reworking the tax code, actually raised my federal taxes. When the GOP talks about “revenue neutral” you can bet the middle class will be slammed hard.

The GOP complains loudly about the 47 million who pay no income tax. As I have pointed out previously, that is also the number of people living below the poverty line (many still pay sales and payroll taxes). The fact that the ranks of the poor have been increasing over 20 years is ample testimony that trickle-down economics does not trickle down. Republican economic policy is directly responsible for the increasing segregation of wealth into the have’s and have not’s.

Discretionary income is that amount of money a person has left over after paying their financial obligations. The poor have no discretionary income. The middle class has some spending money but that is dwindling more rapidly than most people appreciate. The wealthy have plenty of discretionary money and the amount is increasing but yet the GOP thinks they should not pay more to decrease the debt. The GOP is not trying to cripple the government, as they claim, but they are crippling everybody but the wealthy. If you truly believe in supply and demand, what good is it for the wealthy to continue to accumulate wealth at the expense of the middle and lower classes? Without discretionary income, demand dries up and the economy, and available jobs, shrinks. I might not agree with some of the tactics of the Occupy Wall Street movement (after all, if the Tea Party had acted like that we would have been up in arms) but I surely understand, and share, their angst and frustration.

There are some indications that the GOP recognizes that the tide of public opinion is against them. They are beginning to back off of their rigid and ideological no-tax position. As I said last week, the neoconservatives are encountering resistance within the GOP and the party appears to be fragmenting. That is good news for the people of this country, especially the middle class, because I doubt that there are any readers of this column that would not be significantly, and negatively, impacted by the current GOP policies if they ever see the light of day.